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2009-01-01
2009-12-31
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2008-12-31
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2010-06-30
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2009-06-30
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2009-01-01
2009-06-30
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2010-01-01
2010-06-30
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<div align="left" style="font-family: 'Times New Roman',Times,serif">
<!-- xbrl,ns -->
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<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Basis of Presentation</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     These unaudited interim condensed consolidated financial statements reflect all normal
recurring adjustments which are, in the opinion of management, necessary to state fairly, in all
material respects, the financial position of Atmel Corporation (“the Company” or “Atmel”) and its
subsidiaries as of June 30, 2010 and the results of operations for the three and six months ended
June 30, 2010 and 2009 and cash flows for the six months ended
June 30, 2010 and 2009. All intercompany
balances have been eliminated. Because all of the disclosures required by U.S. generally accepted
accounting principles are not included, as permitted by the rules of the Securities and Exchange
Commission (the “SEC”), these interim condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and accompanying notes included in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The December 31,
2009 year-end condensed balance sheet data was derived from the audited consolidated financial
statements and does not include all of the disclosures required by U.S. generally accepted
accounting principles. The condensed consolidated statements of operations for the periods
presented are not necessarily indicative of results to be expected for any future period, nor for
the entire year.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant estimates in these financial statements include provisions for excess and obsolete
inventory, sales return reserves, stock-based compensation expense, allowances for doubtful
accounts receivable, warranty reserves, estimates for useful lives associated with long-lived
assets, charges for grant repayments, recoverability of goodwill and intangible assets,
restructuring charges, certain accrued liabilities, fair value of net assets held for sale and
income taxes and income tax valuation allowances. Actual results could differ materially from those
estimates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Inventories</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Inventories are stated at the lower of standard cost (which approximates actual cost on a
first-in, first-out basis for raw materials and purchased parts; and an average-cost basis for work
in progress and finished goods) or market. Market is based on estimated net realizable value. The
Company establishes provisions for lower of cost or market and excess and obsolescence write-downs.
The determination of obsolete or excess inventory requires an estimation of the future demand for
the Company’s products and these reserves are recorded when the inventory on hand exceeds
management’s estimate of future demand for each product. Once the inventory is written down, a new
cost basis is established and these inventory reserves are not relieved until the related inventory
has been sold or scrapped. As of June 30, 2010, inventories totaling $7,152 were reclassified to
current assets held for sale in connection with the expected sale of the Company’s SmartCard
business to INSIDE Contactless S.A. As of December 31, 2009, inventories totaling $16,139 were
classified as current assets held for sale in connection with the sale of the manufacturing
operations in Rousset, France which was completed in June 2010 (see Note 12).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Inventories are comprised of the following:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials and purchased parts
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,102</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,525</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work-in-progress
</div></td>
<td> </td>
<td> </td>
<td align="right">126,614</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">135,415</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">62,657</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">79,356</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">198,373</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">226,296</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Recent Accounting Pronouncements</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance that
revises analysis for identifying the primary beneficiary of a variable interest entity (“VIE”), by
replacing the previous quantitative-based analysis with a framework that is based more on
qualitative judgments. The new guidance requires the primary beneficiary of a VIE to be identified
as the party that both (i) has the power to direct the activities of a VIE that most significantly
impact its economic performance and (ii) has an obligation to absorb losses or a right to receive
benefits that could potentially be significant to the VIE. This guidance is effective for financial
statements issued for fiscal years, and interim periods within those fiscal years, beginning after
November 15, 2009. The adoption of this guidance did not have a material impact on the Company’s
condensed consolidated results of operations and financial position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2010, the FASB issued guidance that expands the interim and annual disclosure
requirements of fair value measurements, including the information about movement of assets between
Level 1 and 2 of the three-tier fair value hierarchy established under its fair value measurement
guidance. This guidance also requires separate disclosure for purchases, sales, issuances and
settlements in the reconciliation for fair value measurements using significant unobservable inputs
using Level 3 methodologies. Except for the detailed disclosure in the Level 3 reconciliation,
which is effective for the fiscal years beginning after December 15, 2010, all the other
disclosures under this guidance became effective for interim and annual periods beginning after
December 15, 2009. The adoption of the disclosure portion of the guidance did not have a material
impact on the Company’s condensed consolidated results of operations and financial position. The
Company does not expect the adoption of the portion of the guidance
related to the Level 3 reconciliation to have a
material impact on the Company’s consolidated results of operations and financial position.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for
the consolidation of VIEs. The elimination of the concept of a QSPE, removes the exception from
applying the consolidation guidance within this amendment. This amendment requires an enterprise to
perform a qualitative analysis when determining whether or not it must consolidate a VIE. The
amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE.
Additionally, the amendment requires enhanced disclosures about an enterprise’s involvement with
VIEs and any significant change in risk exposure due to that involvement, as well as how its
involvement with VIEs impacts the enterprise’s financial statements. Finally, an enterprise will be
required to disclose significant judgments and assumptions used to determine whether or not to
consolidate a VIE. This amendment is effective for financial statements issued for fiscal years
beginning after November 15, 2009. The adoption of this amendment did not have a material impact on
the Company’s condensed consolidated results of operations and financial condition. See Note 12 for
further discussion.
</div>
</div>
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<!-- Begin Block Tagged Note 2 - us-gaap:InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 2 INVESTMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Investments at June 30, 2010 and December 31, 2009 are primarily comprised of corporate equity
securities, U.S. and foreign corporate debt securities, guaranteed variable annuities and
auction-rate securities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     All marketable securities are deemed by management to be available-for-sale and are reported
at fair value, with the exception of certain auction-rate securities as described below. Net
unrealized gains or losses that are not deemed to be other than temporary are reported within
stockholders’ equity on the Company’s condensed consolidated balance sheets as a component of
accumulated other comprehensive income. Gross realized gains or losses are recorded based on the
specific identification method. In each of the three and six months ended June 30, 2010, the
Company recorded gross realized gains of $2,155 from the sale of short-term investments in interest
and other income (expense), net on the condensed consolidated statements of operations. In the
three and six months ended June 30, 2009, the Company’s gross realized gains or losses on
short-term investments were not material. The Company’s investments are further detailed in the
table below:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>December 31, 2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Adjusted Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Adjusted Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate equity securities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">87</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">119</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">132</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">4,870</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">4,906 </td>
<td nowrap="nowrap">*</td>
<td> </td>
<td> </td>
<td align="right">5,370</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">5,392</td>
<td nowrap="nowrap">*</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities and other obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">22,779</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,592</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,506</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,373</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">27,736</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,617</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">38,963</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40,897</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unrealized gains
</div></td>
<td> </td>
<td> </td>
<td align="right">97</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,987</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unrealized losses
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(216</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net unrealized (losses) gains
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(119</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,934</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">27,617</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40,897</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amount included in short-term investments
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,361</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">38,631</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amount included in other assets
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,256</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,266</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,617</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40,897</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Includes the fair value of the Put Option of $86 and $98 at June 30, 2010 and December 31,
2009, respectively, related to an offer from UBS Financial Services Inc, (“UBS”) to purchase
auction-rate securities of $2,650 and $3,126 at June 30, 2010 and December 31, 2009, respectively.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2010, auctions for auction-rate securities held by
the Company have continued to fail and as a result these securities have continued to be illiquid.
The Company concluded that $2,220 (book value) of these securities are unlikely to be liquidated
within the next twelve months and classified these securities as long-term investments, which is
included in other assets on the condensed consolidated balance sheets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In October 2008, the Company accepted an offer from UBS Financial Services Inc. (“UBS”) to
purchase certain auction-rate securities held by the Company of $2,650 at par value (the “Put
Option”) at any time during a two-year time period from June 30, 2010 to July 2, 2012. As a result
of this offer, the Company sold the securities to UBS at par value of $2,650 on July 1, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Contractual maturities (at book value) of available-for-sale debt securities as of June 30,
2010, were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due within one year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">20,224</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due in 1-5 years
</div></td>
<td> </td>
<td> </td>
<td align="right">5,205</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due in 5-10 years
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due after 10 years
</div></td>
<td> </td>
<td> </td>
<td align="right">2,220</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">27,649</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Atmel has classified all investments with maturity dates of 90 days or more as short-term
as it has the ability and intent to redeem them within the year, with the exception of our
remaining auction-rate securities which are included in other assets on the condensed consolidated
balance sheets.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 3 FAIR VALUE OF ASSETS AND LIABILITIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company applies the accounting standard that defines fair value as “the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date (exit price).” The standard establishes a consistent
framework for measuring fair value and expands disclosure requirements about fair value
measurements. The accounting standard, among other things, requires the Company to maximize the use
of observable inputs and minimize the use of unobservable inputs when measuring fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The table below presents the balances of investments measured at fair value on a recurring
basis at June 30, 2010:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Assets</i></b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,490</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,490</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Short-term investments</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">119</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">119</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">2,650</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,650</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities, including government backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">22,592</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,592</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Other assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">2,256</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,256</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Deferred compensation plan assets
</div></td>
<td> </td>
<td> </td>
<td align="right">3,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">37,280</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,782</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,592</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,906</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The table below presents the balances of investments measured at fair value on a recurring
basis at December 31, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>December 31, 2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b><i>Assets</i></b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">76,917</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">76,917</td>
<td> </td>
<td> </td>
<td align="left"><b><i>$</i></b></td>
<td align="right"><b><i>—</i></b></td>
<td> </td>
<td> </td>
<td align="left"><b><i>$</i></b></td>
<td align="right"><b><i>—</i></b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Short-term investments</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">132</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">3,126</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,126</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate debt securities, including government backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">35,373</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,373</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Other assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td> </td>
<td align="right">2,266</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,266</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Deferred compensation plan assets
</div></td>
<td> </td>
<td> </td>
<td align="right">3,109</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,109</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">120,923</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">80,158</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35,373</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,392</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s investments, with the exception of auction-rate securities, are classified
within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market
prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price
transparency. The types of instruments valued based on quoted market prices in active markets
include most U.S. government and agency securities, sovereign government obligations, and money
market securities. Such instruments are generally classified within Level 1 of the fair value
hierarchy. The types of instruments valued based on other observable inputs include corporate debt
securities and other obligations. Such instruments are generally classified within Level 2 of the
fair value hierarchy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Auction-rate securities are classified within Level 3 as significant assumptions are not
observable in the market. The total amount of assets measured using Level 3 valuation methodologies
represented less than 1% of total assets as of June 30, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of the changes in Level 3 assets measured at fair value on a recurring basis is as
follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="19%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Sales and</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Balance at</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Sales and</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Balance at</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unrealized</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>December 31,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Balance at</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Sales and Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unrealized</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Balance at</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>January 1, 2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Settlements</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Settlements</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Settlements</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Gains</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="35"><b><i>(in thousands)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Auction-rate securities
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">8,795</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">22</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3,425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">5,392</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(300</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">5,092</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">4,906</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:IntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 4 INTANGIBLE ASSETS, NET</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Intangible assets, net, consisted of technology licenses and acquisition-related intangible
assets as follows:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Core/licensed technology
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">90,718</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">90,718</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated amortization
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(77,121</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(74,291</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total technology licenses
</div></td>
<td> </td>
<td> </td>
<td align="right">13,597</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,427</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisition-related intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">22,413</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,413</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated amortization
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,194</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,999</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total acquisition-related intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">11,219</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,414</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total intangible assets, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">24,816</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,841</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Amortization expense for technology licenses totaled $1,404 and $1,186 in the three
months ended June 30, 2010 and 2009, respectively, and $2,830 and $2,324 in the six months ended
June 30, 2010 and 2009, respectively. Amortization expense for acquisition-related intangible
assets totaled $1,136 and $1,234 in the three months ended June 30, 2010 and 2009, respectively,
and $2,195 and $2,528 in the six months ended June 30, 2010 and 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table presents the estimated future amortization of the technology licenses and
acquisition-related intangible assets:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Technology</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Acquisition-Related</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Years Ending December 31:</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Licenses</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Intangible Assets</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2010 (July1 through December 31)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,587</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,272</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,859</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2011
</div></td>
<td> </td>
<td> </td>
<td align="right">4,719</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,192</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,911</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2012
</div></td>
<td> </td>
<td> </td>
<td align="right">4,353</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,076</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,429</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2013
</div></td>
<td> </td>
<td> </td>
<td align="right">1,938</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">679</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,617</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total future amortization
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">13,597</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24,816</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:DebtDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 5 BORROWING ARRANGEMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Information with respect to the Company’s debt and capital lease obligations as of June 30,
2010 and December 31, 2009 is shown in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Various interest-bearing notes and term loans
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,305</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,484</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Bank lines of credit
</div></td>
<td> </td>
<td> </td>
<td align="right">80,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">80,000</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Capital lease obligations
</div></td>
<td> </td>
<td> </td>
<td align="right">383</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,442</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,688</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">94,926</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: current portion of long-term debt and capital lease obligations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(80,373</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(85,462</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term debt and capital lease obligations due after one year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,315</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,464</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Maturities of long-term debt and capital lease obligations are as follows:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Years Ending December 31:</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2010 (July 1 through December 31)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">80,620</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2011
</div></td>
<td> </td>
<td> </td>
<td align="right">86</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2012
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2013
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2014
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Thereafter
</div></td>
<td> </td>
<td> </td>
<td align="right">3,305</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">84,011</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Less: amount representing interest
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(323</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,688</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On March 15, 2006, the Company entered into a five-year asset-backed credit facility for
up to $165,000 (reduced to $125,000 on November 6, 2009) with certain European lenders. This
facility is secured by the Company’s non-U.S. trade receivables. The eligible non-US trade
receivables were $103,823 at June 30, 2010, of which the amount outstanding under this facility was
$80,000 at June 30, 2010. Borrowings under the facility bear interest at LIBOR plus 2% per annum
(approximately 2.34% based on the one month LIBOR at June 30, 2010), while the undrawn portion is
subject to a commitment fee of 0.375% per annum. The outstanding balance is subject
to repayment in full on the last day of its interest period (every two months). The terms of
the facility subject the Company to certain financial and other covenants and cross-default
provisions. The Company was not in compliance with a financial covenant (i.e. fixed charge ratio)
as of June 30, 2010. The Company obtained a waiver of such failure to comply on August 3, 2010.
Commitment fees and amortization of up-front fees paid related to the facility in the three months
ended June 30, 2010 and 2009 totaled $194 and $242, respectively, and $496 and $539 in the six
months ended June 30, 2010 and 2009, respectively, and are included in interest and other income (expense), net,
in the condensed consolidated statements of operations. The outstanding balance under this facility
is classified within bank lines of credit in the summary debt table above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Of the Company’s remaining outstanding debt obligations of $3,688 as of June 30, 2010, $383
are classified as capital leases and $3,305 as interest bearing notes in the summary debt table.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of the Company’s debt approximated its book value as of June 30, 2010 and
December 31, 2009 due to their relatively short-term nature as well as the variable interest rates
on these debt obligations.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 6 STOCK-BASED COMPENSATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b><i>Option and Employee Stock Purchase Plans</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2005 Stock Plan was approved by stockholders on May 11, 2005. As of June 30, 2010, 114,000
shares were authorized for issuance under the 2005 Stock Plan, and 29,161 shares of common stock
remained available for grant. Under Atmel’s 2005 Stock Plan, Atmel may issue common stock directly,
grant options to purchase common stock or grant restricted stock units payable in common stock to
employees, consultants and directors of Atmel. Options, which generally vest over four years, are
granted at fair market value on the date of the grant and generally expire ten years from that
date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Activity under Atmel’s 2005 Stock Plan is set forth below:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Outstanding Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted-</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Exercise</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Available</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Price</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Exercise Price</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>for Grant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>per Share</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>per Share</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15"><b><i>(in thousands, except per share data)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, December 31, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>28,478</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>18,828</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td nowrap="nowrap" align="right"><b>1.68-$24.44</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.38</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(462</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjustment for restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(360</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units cancelled
</div></td>
<td> </td>
<td> </td>
<td align="right">636</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjustment for restricted stock units cancelled
</div></td>
<td> </td>
<td> </td>
<td align="right">496</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">157</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4.77</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.77</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Options cancelled/expired/forfeited
</div></td>
<td> </td>
<td> </td>
<td align="right">341</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(341</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">2.11-$24.44</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.60</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(321</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">1.68-$4.74</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.00</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, March 31, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>28,972</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>18,323</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td nowrap="nowrap" align="right"><b>1.68-$21.47</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.37</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(386</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjustment for restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(301</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Performance based restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(282</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjustment for performance based restricted stock units issued
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(220</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units cancelled
</div></td>
<td> </td>
<td> </td>
<td align="right">745</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Adjustment for restricted stock units cancelled
</div></td>
<td> </td>
<td> </td>
<td align="right">581</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(82</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">82</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.20</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Options cancelled/expired/forfeited
</div></td>
<td> </td>
<td> </td>
<td align="right">134</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">2.11-$21.47</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6.13</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(391</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td nowrap="nowrap" align="right">1.80-$5.62</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.57</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, June 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>29,161</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>17,880</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td nowrap="nowrap" align="right"><b>1.68-$20.19</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.38</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Restricted stock units are granted from the pool of options available for grant. On May
14, 2008, the Company’s stockholders approved an amendment to its 2005 Stock Plan whereby every
share underlying restricted stock, restricted stock units (including performance-based restricted
stock units), and stock purchase rights issued on or after May 14, 2008 will be counted against the
numerical limit for options available for grant as 1.78 shares in the table above. If shares
issued pursuant to any restricted stock, restricted stock unit, and stock purchase right agreements
are cancelled, forfeited or repurchased by the Company and would otherwise return to the 2005 Stock
Plan, 1.78 times the number of shares will return to the plan and will again become available for
issuance. The Company issued 25,774 restricted stock units from May 14, 2008 to June 30, 2010 (net
of cancellations), resulting in a reduction of 45,877 shares available for grant under the 2005
Stock Plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Restricted Stock Units</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Activity related to restricted stock units is set forth below:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted-Average</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Units</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Per Share</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b><i>(in thousands, except per share data)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, December 31, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>24,044</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.38</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units issued
</div></td>
<td> </td>
<td> </td>
<td align="right">462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.73</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(583</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4.80</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(636</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3.55</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, March 31, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,287</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.40</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units issued
</div></td>
<td> </td>
<td> </td>
<td align="right">386</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.28</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Performance based restricted stock units issued
</div></td>
<td> </td>
<td> </td>
<td align="right">282</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.00</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(539</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5.45</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(745</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4.15</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balances, June 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,671</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4.40</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2010, 539 and 1,122 restricted stock units
vested, respectively, including 194 and 376 units withheld for taxes, respectively. These vested
restricted stock units had a weighted-average fair value of $5.28 and $5.11 per share on the
vesting dates, respectively. As of June 30, 2010, total unearned stock-based compensation related
to nonvested restricted stock units previously granted (including performance-based restricted
stock units) was approximately $65,228, excluding forfeitures, and is expected to be recognized
over a weighted-average period of 2.18 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2009, 100 and 815 restricted stock units vested,
respectively, including 33 and 291 units withheld for taxes, respectively. These vested restricted
stock units had a weighted-average fair value of $3.62 and $3.23 on the vesting dates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Performance-Based Restricted Stock Units</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the year ended December 31, 2008, the Company issued performance-based restricted stock units to
eligible employees for a maximum of 9,914 shares of the Company’s common stock under the 2005 Stock
Plan. These restricted stock units vest on a graded scale, only if the Company achieves certain
quarterly operating margin performance criteria over the performance period of July 1, 2008 to
December 31, 2012. In June 2009, the performance period was extended by one additional year to
December 31, 2012 which was considered a modification to the performance-based restricted stock
units.
In the six months ended June 30, 2009, the Company issued additional
performance-based restricted stock units to eligible employees for a
maximum of 83 shares of the Company’s common stock.
In each of the three and six months ended June 30, 2010, the Company issued additional
performance-based restricted stock units to eligible employees for a maximum of 282 shares of the
Company’s common stock. Until restricted stock units are vested, they do not have the voting rights
of common stock and the shares underlying the awards are not considered issued and outstanding. The
Company recognizes the stock-based compensation expense for the
portion of its performance-based restricted stock
units when management believes it is probable that the Company will achieve the performance
criteria. The awards vest once the performance criteria are met. If the performance goals are
unlikely to be met, no compensation expense is recognized and any previously recognized
compensation expense is reversed. The expected cost of each award is reflected over the performance
period and is reduced for estimated forfeitures. In the three months ended June 30, 2010, as a
result of significant improvements in the Company’s current and forecasted operating results and
customer order status, the Company’s management revised its estimates of the Company’s ability to
meet the performance plan criteria such that they will be achieved earlier than previously
estimated and at a higher vesting level. As a result, in the three months ended June 30, 2010, the
Company recognized a cumulative adjustment to stock-based
compensation expense for the portion of its
performance-based restricted stock units
related to services through March 31, 2010 totaling
$8,771. The Company recorded total stock-based
compensation expense related to performance-based restricted stock units of $14,058 and $15,044 in
the three and six months ended June 30, 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Stock Option Awards</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2010, the number of stock options exercised under
Atmel’s stock option plan was 391 and 712, respectively, which had an intrinsic value of $798 and
$1,453, respectively. In the three and six months ended June 30, 2009, the number of stock options
exercised under Atmel’s stock option plan was 314 and 613, respectively, which had an intrinsic
value of $412 and $625, respectively. Stock options exercised in the three and six months ended
June 30, 2010 had an aggregate exercise price of $1,395 and $2,356, respectively, and stock options
exercised in the three and six months ended June 30, 2009 had an aggregate exercise price of $816
and $1,675, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On August 3, 2009, the Company commenced an exchange offer whereby eligible employees were
given the opportunity to exchange some or all of their outstanding stock options with an exercise
price greater than $4.69 per share (which was equal to the 52-week high of the Company’s per share
stock price as of the start of the offer) that were granted on or before August 3, 2008, whether
vested or unvested, for restricted stock units or, for certain employees, a combination of
restricted stock units and stock options and the exchange ratio was based on the per share exercise
price of the eligible stock options. The Company completed the exchange offer on August 28, 2009,
under which 9,484 stock options were exchanged for 1,354 stock options and 2,297 restricted stock
units. The modification of these stock options did not result in a material charge to the Company’s
financial results in the year ended December 31, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each option grant is estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.10</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.34</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.24</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.28</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">5.58</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.78</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.58</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.78</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">53</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">57</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">54</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">57</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividend yield
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s weighted-average assumptions for the three and six months ended June 30,
2010 and 2009 were determined in accordance with the accounting standard on stock-based
compensation and are further discussed below.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The expected life of employee stock options represents the weighted-average period the stock
options are expected to remain outstanding and was derived based on an evaluation of the Company’s
historical settlement trends including an evaluation of historical exercise and expected
post-vesting employment-termination behavior. The expected life of employee stock options impacts
all underlying assumptions used in the Company’s Black-Scholes option-pricing model, including the
period applicable for risk-free interest and expected volatility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The risk-free interest rate assumption is based upon observed interest rates appropriate for
the expected life of the Company’s employee stock options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company calculates the historic volatility over the expected life of the employee stock
options and believes this to be representative of the Company’s expectations about its future
volatility over the expected life of the option.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The dividend yield assumption is based on the Company’s history and expectation of dividend
payouts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average estimated fair value of options granted in the three and six months ended
June 30, 2010 was $2.61 and $2.50, respectively, and in the three and six months ended June 30,
2009 was $1.95 and $1.94, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Employee Stock Purchase Plan</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Under the 1991 Employee Stock Purchase Plan (“1991 ESPP”), qualified employees are entitled to
purchase shares of Atmel’s common stock at the lower of 85 percent of the fair market value of the
common stock at the date of commencement of the six-month offering period or at the last day of the
offering period. Purchases are limited to 10 percent of an employee’s eligible compensation. There
were 1,048 and 1,034 shares purchased under the 1991 ESPP in the six months ended June 30, 2010 and 2009
at an average price per share of $3.28 and $3.15, respectively. During the 2010 Annual
Stockholders’ Meeting, the Company’s stockholders approved a new 2010 Employee Stock Purchase Plan
(“2010 ESPP”) and authorized an additional 25,000 shares for issuance under the 2010 ESPP. Of the
42,000 shares authorized for issuance under the 1991 ESPP, 3,703 shares were available for issuance
at June 30, 2010. No shares have been issued under the 2010 ESPP.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each purchase under the ESPP is estimated on the date of the beginning of
the offering period using the Black-Scholes option pricing model. The following assumptions were
utilized to determine the fair value of the Company’s ESPP shares:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.18</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.46</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.18</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.46</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">0.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.50</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.50</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">41</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">87</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">41</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">87</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividend yield
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The
weighted-average fair value of the rights to purchase shares under
the 1991 ESPP for
offering periods started in the six months ended June 30, 2010 and 2009 was $0.77 and $1.13,
respectively. Cash proceeds for the issuance of shares under the 1991 ESPP were $3,437 and $3,250 in the
six months ended June 30, 2010 and 2009, respectively. There
were no 1991 ESPP purchases in the three
months ended June 30, 2010 and 2009.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the distribution of stock-based compensation expense related to
employee stock options, restricted stock units, performance-based restricted stock units and
employee stock purchases in the three and six months ended June 30, 2010 and 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,187</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">899</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,864</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,095</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">6,301</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,795</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,585</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,457</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling, general and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">13,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,718</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,242</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total stock-based compensation expense, before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">21,650</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,412</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,622</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,794</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Tax benefit
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total stock-based compensation expense, net of income taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,650</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,412</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31,622</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,794</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The
table above excluded stock-based compensation (credit) expense
of $0 and $(3,065) in
the three and six months ended June 30, 2010 and $1,891 and $3,782 in the three and six months
ended June 30, 2009, respectively, related to the Quantum acquisition, which is classified within
acquisition-related charges (credits) in the condensed consolidated statements of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     There was no significant non-employee stock-based compensation expense in the three and six
months ended June 30, 2010 and 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2010, total unearned compensation expense related to nonvested stock options
was approximately $14,563, excluding forfeitures, and is expected to be recognized over a
weighted-average period of 1.29 years.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 7 ACCUMULATED OTHER COMPREHENSIVE INCOME</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Comprehensive income is defined as a change in equity of a company during a period, from
transactions and other events and circumstances excluding transactions resulting from investments
by owners and distributions to owners. The primary difference between net loss and comprehensive
income for the Company arises from foreign currency translation adjustments, actuarial gains
related to defined benefit pension plans and net unrealized (loss) gains on investments. The
components of accumulated other comprehensive income at June 30, 2010 and December 31, 2009, net of
tax, are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,726</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">135,839</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Actuarial gains related to defined benefit pension plans
</div></td>
<td> </td>
<td> </td>
<td align="right">1,401</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,697</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net unrealized (loss) gain on investments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(119</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,934</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total accumulated other comprehensive income</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,008</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">140,470</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The components of comprehensive (loss) income in the three and six months ended June 30,
2010 and 2009 are as follows:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(36,443</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,407</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(19,828</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,781</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive (loss) income:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,311</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">26,588</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(36,746</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">12,650</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Release of
currency translation adjustments*
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97,367</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97,367</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Actuarial (losses) gains related to
defined benefit pension plans
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(423</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">122</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,296</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">999</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unrealized (losses) gains on investments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,116</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">88</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,053</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">329</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive (loss) income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(119,217</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">26,798</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(137,462</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">13,978</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total comprehensive (loss) income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(155,660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">14,391</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(157,290</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">5,197</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>The release of foreign currency translation adjustments in the six months ended June 30,
2010 was related to the sale of the Company’s Rousset,
France manufacturing operations (see Note 12).</td>
</tr>
</table>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 8 COMMITMENTS AND CONTINGENCIES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Commitments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Indemnifications</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As is customary in the Company’s industry, as provided for in local law in the United States
and other jurisdictions, the Company’s standard contracts provide remedies to its customers, such
as defense, settlement, or payment of judgment for intellectual property claims related to the use
of the Company’s products. From time to time, the Company will indemnify customers against
combinations of loss, expense, or liability arising from various trigger events related to the sale
and the use of the Company’s products and services, usually up to a specified maximum amount. In
addition, the Company has entered into indemnification agreements with its officers and directors
and certain employees, and the Company’s bylaws permit the indemnification of the Company’s agents.
In the Company’s experience, the estimated fair value of the liability is not material.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Subject to certain limitations, the Company is obligated to indemnify certain current and
former directors, officers and employees in connection with litigation related to the timing of
stock option grants awarded by Atmel. These obligations arise under the terms of the Company’s
certificate of incorporation, its bylaws, applicable contracts, and Delaware and California law.
The obligation to indemnify in connection with this litigation generally means that the Company is
required to pay or reimburse the individuals’ reasonable legal expenses incurred in defense of
these matters. The Company is currently paying or reimbursing legal expenses being incurred in
connection with these matters by its current and former directors, officers and employees.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Purchase Commitments</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2010, the Company had certain commitments which were not included on the condensed
consolidated balance sheet at that date. These include outstanding capital purchase commitments of
$18,601 and a purchase commitment for product wafer purchases of approximately $54,011 from Tejas
Silicon Holding Limited. Wafer purchase commitments from the Company’s supply agreement with
LFoundry approximated $448,000 (see Note 12).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Contingencies</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Litigations</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company is party to various legal proceedings. While management currently believes that
the ultimate outcome of these proceedings, individually and in the aggregate, will not have a
material adverse effect on the Company’s financial position or overall trends in results of
operations, litigation is subject to inherent uncertainties. If an unfavorable ruling were to
occur, there exists the possibility of a material adverse impact on the results of operations, cash
flows and financial position of Atmel. The estimate of the potential impact on the Company’s
financial position or overall results of operations or cash flows for the legal proceedings
described below could change in the future. The Company has accrued for losses related to
litigation described below that the Company considers probable and for which the loss can be
reasonably estimated. In the event that a loss cannot be reasonably
estimated, the Company has not accrued for such losses.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     From July through September 2006, six stockholder derivative lawsuits were filed (three in the
U.S. District Court for the Northern District of California and three in Santa Clara County
Superior Court) by persons claiming to be Company stockholders and purporting to act on Atmel’s
behalf, naming Atmel as a nominal defendant and some of its current and former officers and
directors as defendants. Additional derivative actions were filed in the United States District
Court for the Northern District of California (later consolidated with the previously-filed federal
derivative actions) and the Delaware Chancery Court. All the suits contain various causes of action
relating to the timing of stock option grants awarded by Atmel. In June 2008, the federal district
court denied the Company’s motion to dismiss for failure to make a demand on the board, and granted
in part and denied in part motions to dismiss filed by the individual defendants. On March 31,
2010, that court entered an order approving a partial global settlement of these actions, and
several other actions seeking to compel inspection of Company books and records. Among other
things, the settlement resolved all claims against all defendants, except Atmel’s former general
counsel James Michael Ross, related to the allegations and/or matters set forth in all the
derivative actions. The terms of the settlement provided for: (1) a direct financial benefit to
Atmel of $9,650; (2) the adoption and/or implementation of a variety of corporate governance
enhancements, particularly in the way Atmel grants and documents grants of employee stock option
awards; (3) the payment by Atmel of plaintiffs’ counsels’ attorneys’ fees, costs, and expenses in
the amount of $4,940 (which Atmel paid on April 8, 2010); and (4) the dismissal with prejudice of
all claims by and between the settling parties and releases of all claims against the settling
defendants. As the Company previously disclosed on a Form
8-K filed June 28, 2010 (and incorporated by reference herein), on June 18, 2010, the Court
preliminarily approved a settlement of the remaining claims between Atmel, plaintiffs and Mr. Ross
related to the Company’s historical stock option granting practices. The settlement—which the
Court will review at a final approval hearing on August 13, 2010—provides for: (a) payments to the
Company by Atmel’s insurers totaling $2,900; (b) the dismissal with prejudice and release of the
remaining claims against Mr. Ross; and (c) the dismissal without prejudice of Mr. Ross’s related
lawsuit against the Company in Delaware Chancery Court (described below).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On September 28, 2007, Matheson Tri-Gas (“MTG”) filed suit in Texas state court in Dallas
County against the Company. Plaintiff alleges claims for: (1) breach of contract for the Company’s
alleged failure to pay minimum payments under a purchase requirements contract; (2) breach of
contract under a product supply agreement; and (3) breach of contract for failure to execute a
process gas agreement. MTG seeks unspecified damages, pre- and post-judgment interest, attorneys’
fees and costs. In late November 2007, the Company filed its answer denying liability. In July
2008, the Company filed an amended answer, counterclaim and cross claim seeking among other things
a declaratory judgment that a termination agreement cut off any claim by MTG for additional
payments. In an Order entered on June 26, 2009, the Court granted the Company’s motion for partial
summary judgment dismissing MTG’s breach of contract claims relating to the requirements contract
and the product supply agreement. The parties dismissed the remaining claims and, on August 26,
2009, the Court entered a Summary Judgment Order and Final Judgment. MTG filed a Motion to Modify
Judgment and Notice of Appeal on September 24, 2009. The Company intends to vigorously defend the
appeal.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On June 3, 2009, the Company filed an action in Santa Clara County Superior Court against
three of its now-terminated Asia-based distributors, NEL Group Ltd. (“NEL”), Nucleus Electronics
(Hong Kong) Ltd. (“NEHK”) and TLG Electronics Ltd. (“TLG”). The Company seeks, among other things,
to recover $8,500 owed it, plus applicable interest and attorneys fees. On June 9, 2009, NEHK
separately sued Atmel in Santa Clara County Superior Court, alleging that Atmel’s suspension of
shipments to NEHK on September 23, 2008-one day after TLG appeared on the Department of Commerce,
Bureau of Industry and Security’s Entity List-breached the parties’ International Distributor
Agreement. NEHK also alleges that Atmel libeled it, intentionally interfered with contractual
relations and/or prospective business advantage, and violated California Business and Professions
Code Sections 17200 <i>et seq. </i>and 17500 <i>et seq</i>. NEHK alleges damages exceeding $10,000. Both matters
now have been consolidated. On July 29, 2009, NEL filed a cross-complaint against Atmel that
alleges claims virtually identical to those NEHK has alleged, and seeks unspecified damages.
Discovery in the case is ongoing and no trial date has yet been set. The Company intends to
prosecute its claims and defend the NEHK/NEL claims vigorously. TLG did not answer, and the Court
entered a default judgment of $2,697 on November 23, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 16, 2009, James M. Ross, the Company’s former General Counsel, filed a lawsuit in
Santa Clara County Superior Court challenging his termination, and certain actions the Company took
thereafter. The operative complaint now contains 10 causes of action, which all concern the
Company’s treatment of Mr. Ross’s post-termination attempt to exercise stock options and its
alleged breach of a purported oral contract to pay a bonus upon the sale of the Company’s Grenoble
division. Discovery is ongoing and no trial date has yet been set. The Company intends to
vigorously defend this action.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On December 18, 2009, Mr. Ross filed another lawsuit in Delaware Chancery Court seeking
(pursuant to Section 145 of the Delaware General Corporation Law) to enforce certain rights granted
him under his indemnification agreement with the Company, and to recover damages for any breach of
that agreement. In particular, Mr. Ross alleges that the Company breached the agreement in the way
it negotiated and structured the partial global settlement in December 2009 in the backdating
cases, described above. He also seeks advancement of fees and indemnification in connection with
the Delaware lawsuit. Pursuant to the Settlement Agreement the
Company reached with him in the
federal backdating cases, Mr. Ross will file a dismissal without prejudice of this action within 10
days after entry of the Final Federal Judgment in the backdating cases.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 24, 2009, 56 former employees of Atmel’s Nantes facility filed claims in the First
Instance labour court, Nantes, France against the Company and MHS Electronics claiming that (1) the
Company’s sale of the Nantes facility to MHS (XbyBus SAS) in 2005 did not result in the transfer of
their labor agreements to MHS, and (2) these employees should still be considered Atmel employees,
with the right to claim related benefits from Atmel. Alternatively, each employee seeks damages of
at least 45 Euro and court costs. At an initial hearing on October 6, 2009, the Court set a
briefing schedule and said it will issue a ruling on October 6, 2010. These claims are similar to
those filed in the First Instance labour court in October 2006 by 47 other former employees of
Atmel’s Nantes facility (MHS was not named a defendant in the earlier claims). On July 24, 2008,
the judge hearing the earlier claims issued an oral ruling in favor of the Company, finding that
there was no jurisdiction for those claims by certain “protected employees,” and denying the claims
as to all other employees. Forty of those earlier plaintiffs appealed, and on February 11, 2010,
the Court of Appeal of Rennes, France affirmed the lower court’s
ruling. Thirty-eight of the 40
plaintiffs have elected not to pursue any further appeal, and it is not yet clear if the remaining
two plaintiffs intend to appeal to the Supreme Court of France. The Company intends to continue
defending all these claims vigorously.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     From time to time, the Company is notified of claims that it may be infringing patents issued
to other parties and may subsequently engage in license negotiations regarding these claims. As
well, from time to time, the Company receives from customers demands for indemnification, or claims
relating to the quality of our products, including claims for additional labor costs, costs for
replacing defective parts, reimbursement to customers for damages incurred in correcting their
defective products, costs for product recalls or other damages. The Company accrues for losses
relating to such claims that the Company considers probable and for which the loss can be
reasonably estimated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Other Contingencies</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In October 2008, officials of the European Union Commission (the “Commission”) conducted an
inspection at the offices of one of the Company’s French subsidiaries. The Company was informed
that the Commission was seeking evidence of potential violations by Atmel or its subsidiaries of
the European Union’s competition laws in connection with the Commission’s investigation of
suppliers of integrated circuits for smart cards. On September 21, 2009 and October 27, 2009, the
Commission requested additional information from the Company, and the Company responded to the
Commission’s requests. The Company continues to cooperate with the Commission’s investigation and
has not received any specific findings, monetary demand or judgment through the date of filing this
Form 10-Q. As a result, the Company has not recorded any provision in its financial statements
related to this matter.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     For hardware, software or technology exported from the U.S. or otherwise subject to U.S.
jurisdiction, the Company is subject to U.S. laws and regulations governing international trade and
exports, including, but not limited to the International Traffic in Arms Regulations (“ITAR”), the
Export Administration Regulations (“EAR”) and trade sanctions against embargoed countries and
destinations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control
(“OFAC”). Hardware, software or technology exported from other countries may also be subject to
local laws and regulations governing international trade. Under these laws and regulations, the
Company is responsible for obtaining all necessary licenses or other approvals, if required, for
exports of hardware, software, technology, as well as the provision of technical assistance. The
Company is also required to obtain export licenses, if required, prior to transferring technical
data or software to foreign persons. In addition, the Company is required to obtain necessary
export licenses prior to the export or re-export of hardware, software or technology (i) to any
person, entity, organization or other party identified on the U.S. Department of Commerce Denied
Persons or Entity List, the U.S. Department of Treasury’s Specially Designated Nationals or Blocked
Persons List, or the Department of State’s Debarred List; or (ii) for use in nuclear,
chemical/biological weapons, or rocket systems or unmanned air vehicle applications. A
determination by the U.S. or local government that Atmel has failed to comply with one or more of
these export control laws or trade sanctions, including failure to properly restrict an export to
the persons, entities or countries set forth on the government restricted party lists, could result
in civil or criminal penalties, including the imposition of significant fines, denial of export
privileges, loss of revenues from certain customers, and debarment from participation in U.S.
government contracts. Further, a change in these laws and regulations could restrict our ability to
export to previously permitted countries, customers, distributors, or other third parties. Any one
or more of these sanctions or a change in law or regulations could have a material adverse effect
on the Company’s business, financial condition and results of operations.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Income Tax Contingencies</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s income tax calculations are based on application of the respective U.S. Federal,
state or foreign tax law. The Company’s tax filings are subject to audit by the respective tax
authorities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In 2005, the Internal Revenue Service (“IRS”) completed the fieldwork portion of its audit of
the Company’s U.S. income tax returns for the years 2000 and 2001 and has proposed various
adjustments to these income tax returns, including carry back adjustments to 1996 and 1999. In
January 2007, after subsequent discussions with the Company, the IRS revised its proposed
adjustments for these years. The Company has protested these proposed adjustments and is currently
addressing the matter with the IRS Appeals Division.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2007, the IRS completed the fieldwork portion of its audit of the Company’s U.S. income
tax returns in the years 2002 and 2003 and has proposed various adjustments to these income tax
returns. The Company has protested all of these proposed various adjustments and is currently
addressing the matter with the IRS Appeals Division. In addition, the Company has tax audits in
progress in various foreign jurisdictions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     While the Company believes that the resolution of these audits will not have a material
adverse impact on the Company’s results of operations, cash flows or financial position, the
outcome is subject to significant uncertainties. The Company recognizes tax liabilities for
uncertain tax positions in accordance with the requirements under U.S. GAAP, which involve
evaluating the technical merits of given tax positions and the likelihood of sustaining such positions upon review by
taxing authorities. To the extent the final tax liabilities are different than the amounts
originally accrued, the increases or decreases are recorded as income tax expense or benefit in the
condensed consolidated statements of operations. Income taxes and related interest and penalties
due for potential adjustments may result from the resolution of these examinations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Product Warranties</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company accrues for warranty costs based on historical trends of product failure rates and
the expected material and labor costs to provide warranty services. Our products are generally
covered by a warranty typically ranging from 90 days to two years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the activity related to the product warranty liability in the
three and six months ended June 30, 2010 and 2009.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at beginning of period</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,394</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,229</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,225</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,579</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrual for warranties during
the period, net of change in
estimates
</div></td>
<td> </td>
<td> </td>
<td align="right">493</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">576</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,166</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,419</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Actual costs incurred
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(778</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,069</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,282</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,262</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 0px solid #000000"> </td>
<td style="border-top: 0px solid #000000"> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at end of period</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,109</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,736</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,109</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,736</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 0px double #000000"> </td>
<td style="border-top: 0px double #000000"> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Product warranty liability is included in accrued and other liabilities on the condensed
consolidated balance sheets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><i>Guarantees</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the ordinary course of business, the Company provides standby letters of credit or
other guarantee instruments to certain parties as required for certain transactions initiated by
either the Company or its subsidiaries. As of June 30, 2010, the maximum potential amount of future
payments that the Company could be required to make under these guarantee agreements is $2,000. The
Company has not recorded any liability in connection with these guarantee arrangements. Based on
historical experience and information currently available, the Company believes it will not be
required to make any payments under these guarantee arrangements.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 9 INCOME TAXES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     For
interim periods, the provision for income taxes is determined using the annual
effective tax rate method which excludes entities that are not expected to realize tax benefits from
certain operating losses and excludes the impact of discrete tax
events during the period. As a
result, the Company’s provision for income taxes, excluding discrete events, is at a higher
consolidated effective rate than would have resulted if all entities were profitable or if losses
from excluded entities produced realizable tax benefits.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2010, the Company recorded an income tax benefit of $39,657
and $37,014, respectively. The benefits primarily related to a net discrete income tax benefit of $43,645
recorded in the three months ended June 30, 2010, associated with the sale of the Company’s wafer
manufacturing operations in Rousset, France, as management determined that this benefit will more likely
than not be realized in current and future periods. In the three and six months ended June 30, 2009, the
Company recorded an income tax benefit of $9,737 and $37,430, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     These benefits also reflected the recognition of certain refundable R&D credits of $304 and
$2,226 in the three and six months ended June 30, 2010 and $2,607 and $29,097 in the three and six
months ended June 30, 2009, respectively. The receipt of these refundable R&D credits was not
dependent on the existence of taxable income. For the six months ended June 30, 2009, the Company
received refunds related to prior years and was able to recognize the tax benefit as a result of
tax law changes and the expiration of statutes of limitations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In 2005, the Internal Revenue Service (“IRS”) proposed adjustments to the Company’s
U.S. income tax returns for the years 2000 and 2001. In January 2007, after subsequent discussions
with the Company, the IRS revised the proposed adjustments for these years. The Company has
protested these proposed adjustments and is currently pursuing administrative review with the IRS
Appeals Division. In May 2007, the IRS proposed adjustments to the Company’s U.S. income tax
returns for the years 2002 and 2003. The Company filed a protest to these proposed adjustments and
is pursuing administrative review with the IRS Appeals Division.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In addition, the Company has tax audits in progress in other foreign jurisdictions. The
Company has accrued taxes and related interest and penalties that may be due upon the ultimate
resolution of these examinations and for other matters relating to open U.S. Federal, state and
foreign tax years in accordance with the applicable US GAAP standards for accounting for uncertain
income tax positions. While the Company believes that the resolution of these audits will not have a material
adverse impact on the Company’s results of operations, cash flows or financial position, the
outcome is subject to uncertainty.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company recognizes tax liabilities for uncertain tax
positions in accordance with the requirements under U.S. GAAP, which involve evaluating the
technical merits of given tax positions and the likelihood of sustaining such positions upon review
by taxing authorities. To the extent the final tax liabilities are different than the amounts
originally accrued, the increases or decreases are recorded as income tax expense of benefit in the
condensed consolidated statements of operations. Income taxes and related interest and penalties
due for potential adjustments may result from the resolution of these examinations, and
examinations of open U.S. federal, state and foreign jurisdictions. Should the Company be unable to
reach agreement with the federal or foreign tax authorities on the various proposed adjustments,
there exists the possibility of an adverse material impact on the Company’s results of operations,
cash flows and financial position.
At June 30, 2010 and December 31, 2009,
the Company had $186,962 and $182,552 of unrecognized tax benefits,
respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Included within long-term liabilities at June 30, 2010 and December 31, 2009 were income taxes
payable totaling $121,317 and $116,404, respectively.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company believes that it is reasonably possible that the IRS audit and the audits in
foreign jurisdictions may be resolved and/or there will be an expiration of the statute of
limitations within the next twelve months, which could result in the potential recognition of
unrecognized tax benefits within the next twelve months of up to $152,000, including tax, interest
and penalties.
</div>
</div>
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<!-- Begin Block Tagged Note 10 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 10 PENSION PLANS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company sponsors defined benefit pension plans that cover substantially all French and
German employees. Plan benefits are provided in accordance with local statutory requirements.
Benefits are based on years of service and employee compensation levels. The plans are unfunded.
Pension liabilities and charges to expense are based upon various assumptions, updated quarterly,
including discount rates, future salary increases, employee turnover, and mortality rates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Retirement plans consist of two types of plans. The first plan type provides for termination
benefits paid to employees only at retirement, and consists of approximately one to five months of
salary. This structure covers the Company’s French employees. The second plan type provides for
defined benefit payouts for the employee’s post-retirement life, and covers the Company’s German
employees.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The aggregate net pension expense relating to the two plan types are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service costs-benefits earned during the period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">149</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">492</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">573</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">986</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost on projected benefit obligation
</div></td>
<td> </td>
<td> </td>
<td align="right">219</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">446</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">595</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">884</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of actuarial (gain) loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Settlement and other related losses
</div></td>
<td> </td>
<td> </td>
<td align="right">907</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">907</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net pension expense
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,270</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">946</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,071</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,875</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Interest cost on projected benefit obligation decreased to $219 and $595 in the three and
six months ended June 30, 2010 from $446 and $884 in the three and six months ended June 30, 2009,
primarily due to reductions in interest rates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Settlement and other related losses of $907 in the three and six months ended June 30, 2010
was primarily related to the Company’s sale of its manufacturing operations in Rousset, France and
was recorded as a charge to cost of revenues in the condensed consolidated statements of
operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cash funding for benefits paid was $53 and $25 in the six months ended June 30, 2010 and 2009,
respectively. Cash funding for benefits to be paid for 2010 is expected to be approximately $686.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s pension liability represents the present value of estimated future benefits to
be paid. With respect to the Company’s unfunded plans in Europe, in the six months ended June 30,
2010, a change in the interest rate assumptions used to calculate the present value of the pension
obligation resulted in a net increase in the pension liability. This resulted in a decrease of
$1,296, net of tax, which was recorded in accumulated other comprehensive income in stockholders’
equity on the condensed consolidated balance sheet at June 30, 2010.
</div>
</div>
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<!-- Begin Block Tagged Note 11 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 11 OPERATING AND GEOGRAPHICAL SEGMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company designs, develops, manufactures and sells a wide range of semiconductor integrated
circuit products. The segments represent management’s view of the Company’s businesses and how it
allocates Company resources and measures performance of its major components. In addition, each
segment consists of product families with similar requirements for design, development and
marketing. Each segment requires different design, development and marketing resources to produce
and sell semiconductor integrated circuits. Atmel’s four reportable segments are as follows:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Microcontrollers </i>segment includes a variety of proprietary and standard microcontrollers,
the majority of which contain embedded nonvolatile memory and integrated analog peripherals.
In March 2008, the Company acquired Quantum, a supplier of capacitive sensing IP solutions.
Results from the acquired operations are considered complementary to sales of
microcontroller products and are included in this segment.</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Nonvolatile Memories </i>segment consists predominantly of serial interface electrically
erasable programmable read-only memory (“SEEPROM”) and serial interface Flash memory
products. This segment also includes parallel interface Flash memories as well as mature
parallel interface electrically erasable programmable read-only memory (“EEPROM”) and
erasable programmable ready-only memory (“EPROM”) devices. This segment also includes
products with military and aerospace applications.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Radio Frequency (“RF”) and Automotive </i>segment includes products designed for the
automotive industry. This segment produces and sells wireless and wired devices for
industrial, consumer and automotive applications and it also provides foundry services which
produce radio frequency products for the mobile telecommunication market.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Application Specific Integrated Circuit (“ASIC”) </i>segment includes custom application
specific integrated circuits designed to meet specialized single-customer requirements for
their high performance devices in a broad variety of specific applications. This segment
also encompasses a range of products which provide security for digital data transaction,
including smart cards for mobile phones, set top boxes, banking and national identity cards.
This segment also includes products with military and aerospace applications. The Company
also develops application specific standard products (“ASSP”) for high reliability space
applications, power management and secure crypto memory products.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company evaluates segment performance based on revenues and income or loss from operations
excluding acquisition-related charges (credits), charges for grant repayments, restructuring
charges, asset impairment charges and loss (gain) on sale of assets. Interest and other
income (expenses), net, nonrecurring gains and losses, foreign exchange gains and losses and income
taxes are not measured by operating segment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Segments are defined by the products they design and sell. They do not make sales to each
other. The Company’s net revenues and segment income (loss) from operations for each reportable
segment in the three and six months ended June 30, 2010 and 2009 are as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Information about Reportable Segments</i></b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Micro-</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Nonvolatile</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>RF and</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Controllers</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Memories</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Automotive</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>ASIC</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="19"><b><i>(in thousands)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Three months ended June 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues from external customers
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">197,601</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">73,554</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">45,282</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">76,924</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">393,361</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Segment income (loss) from operations
</div></td>
<td> </td>
<td> </td>
<td align="right">24,335</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,134</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,068</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(5,421</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">30,116</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Three months ended June 30, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues from external customers
</div></td>
<td> </td>
<td> </td>
<td align="right">101,613</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">69,338</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,385</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">78,206</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">284,542</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segment loss from operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3,209</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(985</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(4,374</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2,676</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11,244</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Six months ended June 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues from external customers
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">348,508</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">151,054</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">91,755</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">150,593</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">741,910</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Segment income (loss) from operations
</div></td>
<td> </td>
<td> </td>
<td align="right">35,694</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,423</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,424</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(6,176</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">44,365</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Six months ended June 30, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues from external customers
</div></td>
<td> </td>
<td> </td>
<td align="right">198,660</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">133,165</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,972</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">156,238</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">556,035</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Segment (loss) income from operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3,819</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,781</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(4,904</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(17,372</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(23,314</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company does not allocate assets by segment, as management does not use asset
information to measure or evaluate a segment’s performance.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Reconciliation of Segment Information to Condensed Consolidated Statements of Operations</i></b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total segment income (loss) from operations
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">30,116</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(11,244</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">44,365</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(23,314</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unallocated amounts:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Acquisition-related (charges) credits
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,167</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,642</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">734</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,141</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Charges for grant repayments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(246</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(249</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,014</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Restructuring charges
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,614</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,470</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,583</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,822</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset impairment charges
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,922</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,922</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">(Loss) gain on sale of assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(94,052</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(94,052</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">164</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consolidated loss from operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(78,885</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(17,605</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(63,969</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(38,127</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Geographic sources of revenues were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">63,363</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,721</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">125,384</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">98,418</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Germany
</div></td>
<td> </td>
<td> </td>
<td align="right">50,060</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34,818</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">98,815</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">71,188</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">France
</div></td>
<td> </td>
<td> </td>
<td align="right">17,071</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,399</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41,252</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United Kingdom
</div></td>
<td> </td>
<td> </td>
<td align="right">3,957</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,574</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,865</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,126</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Japan
</div></td>
<td> </td>
<td> </td>
<td align="right">10,371</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,423</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,537</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,507</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">China, including Hong Kong
</div></td>
<td> </td>
<td> </td>
<td align="right">124,013</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">78,387</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">225,259</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149,157</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Singapore
</div></td>
<td> </td>
<td> </td>
<td align="right">11,260</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,845</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,758</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,084</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Rest of Asia-Pacific
</div></td>
<td> </td>
<td> </td>
<td align="right">67,268</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39,560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">117,365</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,187</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Rest of Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">39,189</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,878</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">81,743</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">58,876</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Rest of the World
</div></td>
<td> </td>
<td> </td>
<td align="right">6,809</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,937</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,667</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,240</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total net revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">393,361</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">284,542</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">741,910</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">556,035</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Net revenues are attributed to countries based on delivery locations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     No single customer accounted for more than 10% of net revenues in each of the three and six
months ended June 30, 2010 and 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Locations of long-lived assets as of June 30, 2010 and December 31, 2009 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">104,302</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">105,017</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Germany
</div></td>
<td> </td>
<td> </td>
<td align="right">16,982</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,408</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">France
</div></td>
<td> </td>
<td> </td>
<td align="right">18,517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,505</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United Kingdom
</div></td>
<td> </td>
<td> </td>
<td align="right">4,204</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,949</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia-Pacific
</div></td>
<td> </td>
<td> </td>
<td align="right">43,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37,726</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Rest of Europe
</div></td>
<td> </td>
<td> </td>
<td align="right">28,004</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,366</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">215,683</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">221,971</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Excluded from the table above are auction-rate securities of $2,256 and $2,266 as of June
30, 2010 and December 31, 2009, which are included in other assets on the condensed consolidated
balance sheets. Also excluded from the table above as of June 30, 2010 and December 31, 2009 are
goodwill of $52,176 and $56,408, respectively, intangible assets, net of $24,816 and $29,841,
respectively, deferred income tax assets of $31,443 and $2,988, respectively, and assets held for
sale of $8,824 and $83,260, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 12 - atml:LossOnSaleOfAssetsAssetImpairmentChargesAndAssetsHeldForSaleTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 12 LOSS ON SALE OF ASSETS, ASSET IMPAIRMENT CHARGES AND ASSETS HELD FOR SALE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company assesses the recoverability of long-lived assets with finite useful lives whenever
events or changes in circumstances indicate that the Company may not be able to recover the asset’s
carrying amount. The Company measures the amount of impairment of such long-lived assets by the
amount by which the carrying value of the asset exceeds the fair market value of the asset, which
is generally determined based on projected discounted future cash flows or appraised values. The
Company classifies long-lived assets as held and used until they are disposed. The Company reports
assets and liabilities that are part of a disposal group and are to be disposed of by sale as held
for sale and recognizes those assets and liabilities on the condensed consolidated balance sheet at
the lower of carrying amount or fair value, less cost to sell. Long-lived assets classified as held
for sale are not depreciated.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Rousset, France</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Loss on Sale of Assets</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On June 23, 2010, the Company completed the sale of its manufacturing operations in Rousset,
France to LFoundry GmbH (“LFoundry”). Under the terms of the agreement, the Company transferred
manufacturing assets and employee liabilities to the buyer in return for nominal cash
consideration. In connection with the sale, the Company entered into certain other ancillary
agreements, including a Manufacturing Services Agreement (“MSA”) in which the Company will purchase
wafers from LFoundry for four years following the closing on a “take-or-pay” basis. Upon closing of
this transaction, the Company recorded a loss on sale of $94,052, which is summarized in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b><i>(in thousands)</i></b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets
transferred, including working capital adjustment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">61,646</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value
of the MSA
</div></td>
<td> </td>
<td> </td>
<td align="right">92,417</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Release of currency translation adjustment
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97,367</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Severance cost liability
</div></td>
<td> </td>
<td> </td>
<td align="right">27,840</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling costs
</div></td>
<td> </td>
<td> </td>
<td align="right">3,173</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other related costs
</div></td>
<td> </td>
<td> </td>
<td align="right">6,343</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Loss on Sale of Assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">94,052</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In connection with the sale of the manufacturing operations, the Company transferred assets
and liabilities specific to the manufacturing operations totaling $61,646 to LFoundry, resulting in
a working capital adjustment to be received from LFoundry of $2,678.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As future wafer purchases under the MSA were negotiated at pricing above their fair value when
compared to current pricing available from third-party foundries, the Company recorded a liability
in conjunction with the sale, representing the present value of the unfavorable purchase
commitment. The Company determined that the difference between the contract prices and market
prices over the term of the agreement totaled $103,660. The present value of this liability, using
a discount rate of 7%, which was based on a rate for unsecured subordinated debt similar to the
Company’s, was determined to be $92,417, and has been included in the loss on sale. The gross value
of the MSA will be recognized as a credit to cost of revenues over the term of the MSA as the
wafers are purchased and the present value discount of $11,243 will be recognized as interest
expense over the same term.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The sale of the Rousset, France manufacturing operations resulted in the substantial
liquidation of the Company’s investment in its European manufacturing facilities, and accordingly,
the Company recorded a gain of $97,367 related to currency translation adjustments (“CTA balance”)
that was previously recorded within stockholders’ equity, as the Company concluded, based on
guidance related to foreign currency, that it should similarly release all remaining related
currency translation adjustments.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Also, as part of the sale, the Company agreed to reimburse LFoundry for severance costs
expected to be incurred subsequent to the sale. The Company entered into an escrow agreement in
which the Company agreed to remit funds to LFoundry for the required benefits and payments to those
employees who are determined to be part of the approved departure plan. The Company recorded a
liability of $27,840 as a component of the loss on sale, which represents management’s best
estimate of the severance amount payable under this arrangement, and which is expected to be paid
by December 31, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As part of the sale of the manufacturing operations, the Company incurred $4,746 in
software/hardware and consulting costs to set up a separate, independent IT infrastructure for
LFoundry. These costs were incurred based on negotiation with LFoundry, provided no benefit to the
Company, and would not have been incurred if the Company was not selling the manufacturing
operations. Therefore, the direct and incremental costs associated with these services were
recorded as part of the loss on sale. The Company also incurred other costs related to the sale of
$1,597, which included performance-based bonuses of $497 for certain employees (no executive
officers were included), related to the completion of the sale of the Rousset manufacturing
operations to LFoundry.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company also incurred direct and incremental selling costs of $3,173, which represented
broker commissions and legal fees associated with the sale to LFoundry.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has retained an equity interest in the manufacturing operations (“the entity”)
sold to LFoundry which provides limited protective rights and no decision-making rights that are
significant to the economic performance of the entity. The Company is an equity holder that is
shielded from economic losses and does not participate fully in the entity’s residual economics,
accordingly, the Company has concluded that its interest in the entity is a variable interest
entity (“VIE”). A VIE must be consolidated if the Company is its primary beneficiary, which has
the power to direct the activities that most significantly impact the VIE’s economic performance or
the obligation to absorb losses or the right to receive benefits of the VIE that could potentially
be significant to the VIE. In determining whether the Company is the
primary beneficiary, it identified the significant activities and the parties that have the
power to direct them, determined the equity, profit and loss participation, and reviewed the
funding and operating agreements. Based on the above factors, the Company determined that it is
not the primary beneficiary and hence will not consolidate the VIE. As part of the sale, the
Company entered into a wafer supply agreement, an arrangement to reimburse employee severance costs
that LFoundry may incur, and has leased land and a building to LFoundry. The Company’s maximum
exposure related to these arrangements is not expected to be significantly in excess of the amounts
recorded and it does not intend to provide any other support to the VIE, financial or otherwise.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Asset Impairment Charges</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The asset disposal group expected to be transferred to the buyer was determined as of December
31, 2009 when the Company reclassified $83,260 in long-term assets as held for sale. Following
further negotiation with the buyer, the Company determined that certain assets should instead
remain with the Company. As a result, the Company reclassified property and equipment to held and
used in the quarter ended June 30, 2010. In connection with this reclassification, the Company
assessed the fair value of these assets to be retained and concluded that the fair value of the
assets was lower than its carrying value less depreciation expense that would have been recognized
had the assets been continuously classified as held and used. As a result, the Company recorded an
asset impairment charge of $11,922 in the second quarter of 2010, as the fair value of the assets
was determined to be insignificant.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>Secure Microcontroller Solutions</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2010, the Company entered into a definitive agreement with INSIDE Contactless (INSIDE)
for the sale of its Secure Microcontroller Solutions (SMS) business based in Rousset, France and
East Kilbride, UK. Pursuant to the definitive agreement, INSIDE will pay $37,000 in cash at the
closing, subject to a post-closing working capital adjustment and an additional cash consideration
of up to $21,000 if certain earnout targets are met in 2010 and 2011. As part of the transaction,
the Company has agreed to make a minority investment in INSIDE of approximately $4,000. The
definitive agreement also provides INSIDE a royalty-based, non-exclusive license to certain
business-related intellectual property in order to support the current SMS business and future
product development. In addition, INSIDE will enter into a multi-year supply agreement to continue
sourcing wafers from the fabrication facility in Rousset, France that the Company recently sold to
LFoundry. The transaction is expected to close by the end of the third quarter of 2010, subject to
certain closing conditions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The proposed sale of the SMS business is not expected to qualify as
discontinued operations as it does not meet the requirement to be
considered a component of an entity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table details the assets and liabilities within the disposal group, which are
classified as held for sale on the condensed consolidated balance sheet as of June 30, 2010:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,152</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td> </td>
<td align="right">1,026</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total current assets held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">8,178</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Non-current assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fixed Assets
</div></td>
<td> </td>
<td> </td>
<td align="right">4,862</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">3,962</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total non current assets held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">8,824</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total assets held for sale
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17,002</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Current liabilities</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued and other liabilities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,712</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total current liabilities held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">2,712</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Pension liability
</div></td>
<td> </td>
<td> </td>
<td align="right">635</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total non-current liabilities held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">635</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Total liabilities held for sale
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,347</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 13 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 13 RESTRUCTURING CHARGES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the activity related to the accrual for restructuring charges
detailed by event in the three and six months ended June 30, 2010 and 2009.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="19%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>January 1,</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Currency</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>March 31,</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Currency</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Translation</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Translation</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Charges</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Payments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Adjustment</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Charges</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Payments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Adjustment</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="35"><b><i>(in thousands)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Third quarter of 2002
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Termination of contract
with supplier
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,592</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,592</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">1,592</td>
<td nowrap="nowrap"> (2)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Second quarter of 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td nowrap="nowrap"> (1)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Third quarter of 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">557</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(37</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(30</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">490</td>
<td nowrap="nowrap"> (1)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">First quarter of 2009
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">969</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(398</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">571</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(184</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(39</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">359</td>
<td nowrap="nowrap"> (1)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other restructuring charges
</div></td>
<td> </td>
<td> </td>
<td align="right">318</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">272</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(45</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">227</td>
<td nowrap="nowrap"> (1)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Second quarter of 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,603</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(76</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,527</td>
<td nowrap="nowrap"> (1)</td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="35" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total 2010 activity</b>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">2,471</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">969</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(444</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(38</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">2,958</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,614</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(229</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(145</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">4,198</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="35" nowrap="nowrap" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 6pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Accrued restructuring charges are classified within accrued and other liabilities on
the condensed consolidated balance sheets and are expected to be paid prior to December 31,
2010.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Relates to a contractual obligation, which is currently subject to litigation.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="19%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>January 1,</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Currency</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>March 31,</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Currency</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Translation</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Charges/</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Translation</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Charges</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Payments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Adjustment</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Credits)</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Payments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Adjustment</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Accrual</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="35"><b><i>(in thousands)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Third quarter of 2002
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Termination of contract
with supplier
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,592</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,592</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,592</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fourth quarter of 2007
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Other restructuring charges
</div></td>
<td> </td>
<td> </td>
<td align="right">218</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(81</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">167</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(125</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Second quarter of 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">42</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(220</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(10</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">47</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(34</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Third quarter of 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">17,575</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">226</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(10,579</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,028</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,194</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(441</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3,971</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,907</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Fouth quarter of 2008
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">3,438</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">567</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2,854</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(10</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,141</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1,145</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">61</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">First quarter of 2009
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,485</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(37</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(11</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,437</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(83</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(520</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">205</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,039</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Second quarter of 2009
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Employee termination costs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,827</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2,777</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="35" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total 2009 activity</b>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,352</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(13,771</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1,061</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">10,578</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,470</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(8,572</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">351</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4,827</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="35" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><b><i>2010 Restructuring Charges</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2010, the Company incurred restructuring charges of
$1,614 and $2,583 consisting of the following:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Charges of $1,614 and $2,583 in the three and six months ended June 30, 2010,
respectively, related to severance costs resulting from involuntary termination of
employees. Employee severance costs were recorded in accordance with the accounting standard
related to costs associated with exit or disposal activities.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>2009 Restructuring Charges</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the three and six months ended June 30, 2009, the Company continued to implement the
restructuring initiatives announced in 2008 and incurred restructuring charges of $2,470 and
$4,822, respectively. The charges relating to this initiative consist of the following:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Net charges of $2,366 and $4,686 in the three and six months ended June 30, 2009,
respectively, related to severance costs resulting from involuntary termination of
employees. Employee severance costs were recorded in accordance with the accounting
standards related to costs associated with exit or disposal activities.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="2%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Charges of $104 and $136 in the three and six months ended June 30, 2009, respectively,
related to facility closure costs.</td>
</tr>
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 14 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 14 NET LOSS PER SHARE</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic net loss per share is calculated by using the weighted-average number of common shares
outstanding during that period. Diluted net income per share is calculated giving effect to all
dilutive potential common shares that were outstanding during the period. Dilutive potential common
shares consist of incremental common shares issuable upon exercise of stock options, upon vesting
of restricted stock units, contingent issuable shares for all periods and accrued issuance of
shares under employee stock purchase plan. No dilutive potential common shares were included in the
computation of any diluted per share amount when a loss from continuing operations was reported by
the Company. Income or loss from operations is the “control number” in determining whether
potential common shares are dilutive or anti-dilutive.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A reconciliation of the numerator and denominator of basic and diluted net loss per share is
provided as follows:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands, except per share data)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(36,443</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,407</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(19,828</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,781</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted-average shares — basic
</div></td>
<td> </td>
<td> </td>
<td align="right">460,249</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,891</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">458,508</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,291</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Incremental shares and share equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted-average shares — diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">460,249</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,891</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">458,508</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,291</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Net loss per share:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Basic</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss per share — basic
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.08</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.03</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.04</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.02</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Diluted</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss per share — diluted
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.08</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.03</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.04</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.02</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes securities which were not included in the
“Weighted-average shares — diluted” used for calculation of diluted net income per share, as their
effect would have been anti-dilutive:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>June 30,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15"><b><i>(in thousands)</i></b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee stock
options and
restricted stock
units outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right">40,960</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,557</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41,598</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,394</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 15 - us-gaap:OtherIncomeAndOtherExpenseDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 15 INTEREST AND OTHER INCOME (EXPENSE), NET</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Interest and other income (expense), net, are summarized in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><b><i>(in thousands)</i></b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest and other income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,078</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">351</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,585</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">781</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,109</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,759</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,357</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,545</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange transaction gains (losses)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,815</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,131</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,898</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,320</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,784</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,539</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">7,126</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,084</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 16 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 16 SUBSEQUENT EVENT</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On August 4, 2010, the Company announced its board of directors has authorized up to $200,000
for a common stock repurchase program. The program authorizes the purchase of the Company’s
common stock in the open market depending upon the market conditions and other factors. The
program does not have an expiration date and the number of shares repurchased and the timing of
repurchases will be based on the level of the Company’s cash balances, general business and market
conditions, regulatory requirements, and other factors, including alternative investment
opportunities.
</div>
</div>
260000
315000
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2211000
false
--12-31
Q2
2010
2010-06-30
10-Q
0000872448
461533956
Yes
Large Accelerated Filer
1650391611
ATMEL CORP
No
Yes
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